Arthshastra Indian Journal of Economics & Research

Open Access Open Access  Restricted Access Subscription Access

Steering Future Research in Microfinance : Standing Atop Existing Literature


Affiliations
1 Welingkar Institute of Management Development and Research, Electronics City Phase -1, Next to BSNL Office, Bangalore - 560 100, India

   Subscribe/Renew Journal


Microfinance has attracted a wide array of researchers worldwide, and as a result, there has been a humungous amount of literature on the subject. Research on microfinance has far-reaching practical implications as it impacts global poverty, thereby providing valuable insights to governments, economists, and non-governmental organizations. However, research on microfinance is constrained by several aspects, as observed by many researchers on the subject. This paper reviewed the existing literature on microfinance and elaborated on the factors that obfuscate the path to a clear understanding of the subject. One such example is the equivocal stance taken by researchers on whether microfinance is restricted to microcredit only or whether it includes other social interventions like training and forming groups. Another factor that undermines research on the subject is the unavailability of granular data, which hinders research on microfinance’s social and financial intermediation aspects. These deterrents to more hygienic research on microfinance have been highlighted in this paper. This review helped steer future research into less charted areas like the cost of social intermediation, separating the effects of social and financial intermediation, and avoiding confusion in the constituents of microfinance. Future researchers must avoid these pitfalls so that their work leads to more meaningful conclusions and is free from anomalies hitherto flagged.

Keywords

Financial Intermediation, Social Intermediation, Microfinance, Microcredit, Microfinance Plus.

JEL Classification Codes : B25, D14, D71, D91, E26, G21

Paper Submission Date : January 13, 2022 ; Paper sent back for Revision : May 15, 2022 ; Paper Acceptance Date : May 26, 2022

User
Subscription Login to verify subscription
Notifications
Font Size

  • Abdulai, A., & Tewari, D. D. (2017). Trade-off between outreach and sustainability of microfinance institutions: Evidence from sub-Saharan Africa. Enterprise Development & Microfinance, 28(3), 162–181. https://doi.org/10.3362/1755-1986.16-00014

  • Alam, S. (2013). The impact of credit and non-credit aspects on self-employment profit: A comparison of microcredit programs and commercial lenders in rural Bangladesh. The Journal of Developing Areas, 47(1), 23–45. https://doi.org/10.1353/jda.2013.0018

  • Armendáriz, B., & Labie, M. (eds.). (2011). The handbook of microfinance. World Scientific. https://doi.org/10.1142/7645

  • Barnett, B. (2011). The economics of microfinance. The Cato Journal, 31(1), 166+. https://link.gale.com/apps/doc/A252553767/AONE?u=anon~e55edcda&sid=googleScholar&xid=64a8c037

  • Beran Samuelson, M. (2013). In pursuit of sustainable good: Microfinance in India. ETD Collection for University of Nebraska - Lincoln. AAI3590968. https://digitalcommons.unl.edu/dissertations/AAI3590968

  • Bhatt, N., & Tang, S.-Y. (2001). Delivering microfinance in developing countries: Controversies and policy perspectives. Policy Studies Journal, 29(2), 319–333. https://doi.org/10.1111/j.1541-0072.2001.tb02095

  • Bradley, S. W., Artz, K., & Hulett, J. (2012). The innovation necessity: Evidence from microcredit in the Dominican Republic. Journal of International Development, 24(S1), S112–S121. https://doi.org/10.1002/jid.1761

  • Chan, S. K.-L. (2018). Hierarchical microcredit networks: Lending and borrowing cliques in self-help groups in Phnom Penh. International Journal of Sociology and Social Policy, 38(11/12), 1008–1023. http://doi.org/10.1108/IJSSP-06-2017-0078

  • Chowdhury, T. A. (2013). Relative effectiveness of alternative microfinance-driven poverty alleviation programs in Bangladesh. Cambridge Scholars Publishing.

  • Fanconi, P. A., & Scheurle, P. (2017). Small money big impact: Fighting poverty with microfinance. John Wiley & Sons.

  • Feroze, S. M., Chauhan, A. K., Malhotra, R., & Kadian, K. S. (2011). Factors influencing group repayment performance in Haryana: Application of Tobit model. Agricultural Economics Research Review, 24(1), 57–66. http://dx.doi.org/10.22004/ag.econ.109416

  • Kamukama, N., & Natamba, B. (2013). Social capital: Mediator of social intermediation and financial services access. International Journal of Commerce and Management, 23(3), 204–215. https://doi.org/10.1108/IJCoMA-02-2012-0013

  • Kundu, A., & Mitra, S. (2010). Group lending scheme operating through primary agricultural credit society: A critical assessment. IUP Journal of Managerial Economics, 8(3), 61–77.

  • Mago, S., & Hofisi, C. (2014). Conceptualizing microfinance for effective smallholder farming in Africa. International Business & Economics Research Journal (IBER), 13(6), 1437–1446. https://doi.org/10.19030/iber.v13i6.8932

  • Mbugua, M. W. (2010). Impact of microfinance services on financial performance of small and micro enterprises in Kenya (Doctoral dissertation), University of Nairobi, Kenya.

  • Mizanur Rahman, M., & Ahmad, F. (2010). Impact of microfinance of IBBL on the rural poor's livelihood in Bangladesh: An empirical study. International Journal of Islamic and Middle Eastern Finance and Management, 3(2), 168–190. http://doi.org/10.1108/17538391011054390

  • Murria, P., & Verma, S. (2013). Microfinance through self-help groups: A thematic perspective. Productivity, 54(3), 302–310.

  • Mutai, R. K., & Osborn, A. G. (2014). Impact of microfinance on economic empowerment of women: The case of microfinance institutions' clients in Narok Town. Journal of Global Business & Economics, 8(1), 1–23.

  • NABARD. (2020). Status of microfinance in India (2019–20). Micro Credit Innovations Department, NABARD.

  • Nagaraj, N., Chandrakanth, M. G., Acker, D., Chengappa, P. G., Shruthi, H. R., Yadava, C. G., and Kanwar, R. (2009). Economic performance of self help groups in Karnataka with special reference to Venkatenahalli in South India. Indian Journal of Agricultural Economics, 64(4), 604–617. https://doi.org/10.22004/ag.econ.204659

  • Nayak, B. B. (2014). The synergy of microfinance : Fighting poverty by moving beyond credit. Sage Publications Pvt. Ltd.

  • Ocasio, V. M. (2012). Essays on the role of microfinance institutions in financial deepening, economic growth and development (Doctoral dissertation), Colorado State University.

  • Olsen, T. D. (2011). When the market meets the state: Microfinance regulation in emerging economies (Doctoral dissertation). University of Wisconsin--Madison.

  • Olu, O. J. (2009, November). Impact of microfinance on entrepreneurial development: The case of Nigeria. In, The International Conference on Economics and Administration, Faculty of Administration and Business, University of Bucharest, Romania.

  • Rotich, I., Lagat, C., & Kogei, J. (2015). Effects of microfinance services on the performance of small and medium enterprises in Kenya. African Journal of Business Management, 9(5), 206–211. http://doi.org/10.5897/AJBM2014.7519

  • Sharma, S., Singh, P., Singh, K., & Chauhan, B. (2017). Group lending model - A panacea to reduce transaction cost? Zagreb International Review of Economics and Business, 20(2), 49–63. http://doi.org/10.1515/zireb-2017-0017

  • Sharma, V., Ruthven, O., & Datta, S. (2012). State of India's livelihoods report 2011. SAGE Publications India Pvt. Ltd.

  • Simkhada, N. R. (2018). Approaches and design of microfinance programmes for the ultra-poor in Nepal. Enterprise Development & Microfinance, 29(3), 276–286. https://doi.org/10.3362/1755-1986.00008

  • Siti-Nabiha, A. K., Azhar, Z., Isa, S. M., & Siti-Nazariah, A. Z. (2018). Measuring social performance: Reconciling the tension between commercial and social logics. International Journal of Social Economics, 45(1), 205–222. http://doi.org/10.1108/IJSE-08-2016-0216

  • Solarin, S. A. (2021). Microfinance services and poverty reduction in Sarawak, Malaysia. International Journal of Economics and Financial Issues, 11(2), 52–55. https://doi.org/10.32479/ijefi.11258

  • Sonam, Aggarwal, S., & Bhushan, V. (2019). Impact analysis of the SHG-bank linkage model on empowerment of women in Dehradun. Arthshastra Indian Journal of Economics & Research, 8(3), 20–31. http://doi.org/10.17010/aijer/2019/v8i3/146034

  • Swamy, V. (2019). Macroeconomic significance of transaction costs in microfinance intermediation. Management Decision, 57(9), 2307–2324. http://doi.org/10.1108/MD-01-2018-0073

  • Toindepi, J. (2016). Investigating a best practice model of microfinance for poverty alleviation: Conceptual note. International Journal of Social Economics, 43(4), 346–362. https://doi.org/10.1108/IJSE-05-2014-0091

  • Ukanwa, I., Xiong, L., & Anderson, A. (2018). Experiencing microfinance: Effects on poor women entrepreneurs' livelihood strategies. Journal of Small Business and Enterprise Development, 25(3), 428–446. http://doi.org/10.1108/JSBED-02-2017-0043

  • Vijaykumar, N., & Naidu, G. (2018). Microfinance training: A magic wand to achieve financial literacy. Arthshastra Indian Journal of Economics & Research, 7(2), 38–49. http://doi.org/10.17010/aijer/2018/v7i2/125144

  • Wondirad, H. A. (2020). Competition and microfinance institutions' performance: Evidence from India. International Journal of Corporate Social Responsibility, 5, Article 6. http://doi.org/10.1186/s40991-020-00047-1

  • Xiong, F., & You, J. L. (2019). The impact paths of social capital and the effects of microfinance: Evidence from rural households in china? China Agricultural Economic Review, 11(4), 704–718. http://doi.org/10.1108/CAER-12-2017-0256

  • Yunus, M., & Jolis, A. (2007). Banker to the poor – The story of Grameen Bank. Penguin Books India.

  • Zainuddin, M., & Yasin, I. M. (2019). The trade-off debate in microfinance: A review of the theoretical and empirical literature. Enterprise Development & Microfinance, 30(1), 36–54. https://doi.org/10.3362/1755-1986.18-00027


Abstract Views: 343

PDF Views: 1




  • Steering Future Research in Microfinance : Standing Atop Existing Literature

Abstract Views: 343  |  PDF Views: 1

Authors

N. V. Vijaykumar
Welingkar Institute of Management Development and Research, Electronics City Phase -1, Next to BSNL Office, Bangalore - 560 100, India

Abstract


Microfinance has attracted a wide array of researchers worldwide, and as a result, there has been a humungous amount of literature on the subject. Research on microfinance has far-reaching practical implications as it impacts global poverty, thereby providing valuable insights to governments, economists, and non-governmental organizations. However, research on microfinance is constrained by several aspects, as observed by many researchers on the subject. This paper reviewed the existing literature on microfinance and elaborated on the factors that obfuscate the path to a clear understanding of the subject. One such example is the equivocal stance taken by researchers on whether microfinance is restricted to microcredit only or whether it includes other social interventions like training and forming groups. Another factor that undermines research on the subject is the unavailability of granular data, which hinders research on microfinance’s social and financial intermediation aspects. These deterrents to more hygienic research on microfinance have been highlighted in this paper. This review helped steer future research into less charted areas like the cost of social intermediation, separating the effects of social and financial intermediation, and avoiding confusion in the constituents of microfinance. Future researchers must avoid these pitfalls so that their work leads to more meaningful conclusions and is free from anomalies hitherto flagged.

Keywords


Financial Intermediation, Social Intermediation, Microfinance, Microcredit, Microfinance Plus.

JEL Classification Codes : B25, D14, D71, D91, E26, G21

Paper Submission Date : January 13, 2022 ; Paper sent back for Revision : May 15, 2022 ; Paper Acceptance Date : May 26, 2022


References





DOI: https://doi.org/10.17010/aijer%2F2022%2Fv11i2%2F172210